Wednesday, May 25, 2022

DML successfully raises cash for Boseto development

The development of Boseto Copper Mine moved into top gear this week after Discovery Metals Limited (DML), the developers of the project, successfully raised enough cash to start construction that will expedite the mid 2012 commissioning.

DML, the Botswana Stock Exchange (BSE) listed mining house, earlier in the week said it wanted to raises P900 million through rights issue and institutional placement to fund the project situated in the north-west part of the country.

The company said on Friday that the institutional placement component was successfully completed raising A$51 million (about P333 million) that was backed by strong demand received from global institutional investors.

“The strong degree of support shown by a wide range of new and high quality international institutional investors through participation in the placement demonstrates the high level of interest in Discovery Metals’ Boseto project, ” Brad Sampson, Managing Director of Discovery Metals said.

The Equity Raising involved the issue of approximately 132 million ordinary shares, which will represent approximately 30 percent of the company’s issued capital.

The interest from monied institutions follows recent developments for Boseto, including the recently completed Bankable Feasibility Study (BFS) and the awarding of surface rights by the Tawana Land Board.

Construction for Boseto has been set to begin in December and mobilisation has started with the target for first production still in 2012.

The A$51 million offer was priced at a 10 percent discount to the last trading price on 3 November 2010 and a 6 percent discount to the 5 day volume weighted average price ending 3 November 2010.

The rights issue would close on December 2, and shares would be allotted by December 10.

The new shares issued to Eligible Shareholders under the Placement will be able to participate in the non renounceable pro rata Rights Issue, which will open on Wednesday 17 November 2010 (Rights Issue).

The Record Date for participation in the Rights Issue is Friday 12 November 2010.

Discovery Metals has appointed UBS AG, Australia Branch as a sole lead manager, bookrunner and underwriter on the Equity Raising (Placement and Rights Issue) while Blackswan Equities Pty Limited, Fairfax I.S. plc, RBS Morgans Limited and Capital Corporate Finance (Pty) Ltd are acting as co-managers on the Equity Raising.

“The structure of this Equity Raising recognises the long term support of existing shareholders while also providing the opportunity to further enhance the shareholder register,” Sampson said when announcing the Equity Raising.

“This Equity Raising further strengthens Discovery Metals’ funding position. Within weeks, we expect to mandate a bank in the lead role to provide the underwritten debt portion of the project finance.”

He added that construction mobilisation has commenced and Discovery Metals was on track to commission the project in first half 2012.

“We are confident that Boseto’s value is clearly demonstrated by the robust economics outlined in the BFS and Boseto Development Plan and supported by a favourable mining jurisdiction in Botswana. Further, we believe that potential to find a second Boseto remains across our significant exploration tenements, which extend over 1,300 km from Boseto to the Namibian border.”

The Rights Issue is a pro rata non renounceable rights issue to Eligible Shareholders, being Shareholders who are registered as the holder of Shares on the Record Date, being 7.00pm AEDT on 12 November 2010, who have a registered address in Australia, New Zealand or Botswana and are eligible under all applicable laws to receive an offer under the Rights Issue.

RELATED STORIES

Read this week's paper